Maximising the benefits - making law firm client relationship management work

This is not an article on why law firm client relationship management is a good idea. Few law firm partners I know and those who manage firms would argue that client relationship management is not beneficial. I often hear partners respond: 'Of course it's valuable. I've been doing that stuff for years. How do you think I built my practice?' True enough. Many lawyers do some of the things that an effective CRM culture requires. Unfortunately, too few law firms institutionalize CRM firm-wide, thereby missing great opportunities to benefit from what CRM does best: provide a tangible means for maximizing the utility of existing client relationships. Firms often invest substantial energy and time securing quality clients only to leave the management of that relationship to partners not skilled in maximizing the value of that relationship.

An effective client relationship management culture benefits the client, the lawyer, and the law firm. Clients benefit in many ways. They receive more focused attention to their needs; they are given greater opportunities to partner with the law firm, if they choose; they learn more about the resources of the law firm. As a senior executive of a major international UK-based corporation said to the client partner of a law firm: 'I didn't know you did that kind of work. I have been sending it down the street for years.' The lawyer benefits because he or she is often viewed as a more valuable resource to the client. An effective CRM programme requires the client partner to more thoroughly understand the client's business and to bring the firm's resources to bear on the client when appropriate. The law firm benefits by having in place a means to protect the work it has from exiting the firm. The managing partner of a UK-based law firm told me not long ago: 'We are great at bringing in new clients, but they go out the back door as fast as we bring them in the front door.' The firm also benefits by separating itself from those firms that ignore or are oblivious to how CRM strengthens relationships between client and law firm.

So why don't more law firms implement an effective CRM program? They have not been trained to do so. This article focuses on what law firm management needs to do for those responsible for effectively managing relationships with existing clients.

First, let's understand what we mean by law firm client relationship management. Client relationship management is a systematic method for managing relationships with existing clients for the purpose of maximizing the utility of each relationship by increasing client satisfaction with a law firm's work product and with the firm's service delivery.

Effective training of lawyers requires an understanding of their communications styles and their motivations. Having tested more than 3,000 lawyers in six countries in a derivative of the Myers-Briggs Type Indicator, it is no surprise than approximately 85 per cent of all law firm lawyers fall into the lower half of the testing quadrant. This means they are either controllers and/or analyzers. Law firm lawyers are bright; they control their matters, and thorough analysis is required in the practice of law. Planning and analysis appeal to the intellect of firm lawyers. Taking necessary CRM is not appealing to all partners.

If management expects its lawyers to take action '“ to do the things that an effective CRM initiative requires - it must provide an answer to an important question that busy lawyers pose: 'What's in it for me'? That is not a selfish question. After all, if partners are busy with client work, why should they take on additional work they often perceive as not needed? While firm peer pressure may stimulate them to give the appearance of commitment to CRM programming, little action will be taken if the lawyers do not see value in it for them and their clients. If firm management cannot demonstrate to its partners the value, based on precedent, to partners of client relationship management programming, the firm is wasting its time and money on CRM.

To stimulate the firm's lawyers to take CRM action, firm management must:

1.) Understand that client retention and expansion are decreasingly dependent on traditional marketing and increasingly related to the value perceived by each client with the interaction it has with the law firm service providers. The providers include the client partner, the lawyers working on client matters who may or may not have direct contact with the client; and the support staff, including para-professionals, secretaries, and consultants.

2.) Determine their clients' value expectations, keeping in mind that client expectations vary. Three sources to determine client expectations are: written statements produced by clients; formal letters of engagement; and research. Once the service team lawyers and support staff understand the client's work product and service delivery expectations, producing a plan to exceed those expectations becomes an integral part of the CRM strategy for that specific client. While written client statements and engagement letters are self explanatory, a brief review of research will further explain its value to the CRM process.

A survey among 685 purchasers of legal services conducted by an independent research firm in San Diego, California concluded the following:

·Technical ability and judgement.'¦'¦'¦.'¦27%

· Responsiveness'¦'¦'¦'¦'¦'¦'¦'¦'¦….25%

·Trust and confidence'¦'¦'¦'¦'¦'¦'¦'¦.25%

· Interest and attention'¦'¦'¦'¦'¦'¦…'¦.23%

The survey firm concluded that one would expect a client to rate technical ability and judgement as the most important quality their lawyers must possess. However, no score can be said to be more important than the other as there is no statistically significant difference between the top and the bottom scores. This means that were another 100 clients surveyed, interest and attention could have been rated as the most important and technical ability and judgement could be rated least important.

3.) Secure feedback from the firm's top clients through face-to-face interviewing. Subjects to be covered include: quality of service; staffing; legal work product; communications (written and oral); billing schemes; need for/quality of business advice; information provided by the law firm. Each of these categories contains subsets to further identify specific quality-of-service issues important to the client. The person to conduct face-to-face reviews for the firm's most important clients should be the firm's chairman or managing partner assuming he or she does not perform matter work for the client to be reviewed. As the number of clients for whom reviews are conducted increases, additional partners '“ neutral to the client work - should conduct face-to-face reviews.

Information obtained from the reviews is shared with the client service providers. The feedback is entered into a database for access '“ most likely on a 'read only' basis by lawyers serving this client or firm-wide for all partners to access. The mere capturing and storing of feedback information into a database will not drive the needed CRM action. However, effective client service planning plus appropriate lawyer incentivization will. Let's look at client service planning and then turn our attention to motivating lawyers to follow-through with needed action.

4.) Provide for client service planning, which is an ongoing process by which law firms identify and develop the matter and service needs of specific clients and match the firm's resources to those needs. The result is a more beneficial and more profitable relationship between law firm and client. The planning session - which requires about one-half day per client and follows a specific agenda, produces focused action steps of value to the client and to the law firm.

 For firm leaders who believe their firm has systems in place, thereby alleviating any need for CRM training, I suggest they ask partners responsible for top clients the following three questions: 1) 'Will you briefly describe all of the legal needs of your client '“ not just the legal needs of your specific specialty'. 2) 'Will you briefly describe your plan to grow the relationship with this specific client'. 3) 'Are you satisfied with the follow-through of your client plan by your team's members?' Honest answers to these questions will tell firm management a great deal about the status of the firm's client relationship management.

5.) Avoid the CRM 'strategic success-tactical failure syndrome' whereby the plan looks good on paper, but fails to be implemented by the responsible lawyers. Know how to incentivize lawyers to take needed CRM action. Here are a few proven suggestions: (a) recognize that client partners respond to different stimuli. For the senior level partner who is secure in his or her position within the firm, who continually proves his or her value to the firm, suggesting money as an incentive can be a negative. (b) while compensation is important, generally speaking, money is less of an incentive in the United Kingdom and in Central Europe than it is in the US. My experience from working for law firms in three continents dictates that, generally speaking, money is less of an Firm management needs to keep in mind that stimulating lawyer follow-through may or may not be about compensation.

6.) Use CRM software or don't invest money and time in it. The issue law firm management faces is not the quality of CRM software; the issue is ensuring that client partner and client service team information is consistently implemented into the software and regularly updated. The key is managing the information regardless of what software is used.

Opportunities for law firms to reap the benefits of an effective client relationship management culture have never been greater. More and more clients expect their law firms to understand their value expectations and to manage legal work product and support services. Law firms that train their partners to effectively manage client relationships will be winners in tomorrow's competitive law firm market.

Byron G. Sabol is an international business development, strategic marketing, client relationship management, and sales generation consultant to law firms in three continents. His clients are located in the US, Australia, Czech Republic, France, Germany, Greece, and the United Kingdom. He can be reached at e-mail: Byro